KRWG

IN FOCUS: Part Two Of A Discussion On NAFTA And Trade

Jan 26, 2018

Last November, Mexican Ambassador to The United States, Mr. Gerónimo Gutiérrez visited the Borderland. Jerry Pacheco, President of the Border Industrial Association was able to visit with the ambassador as he toured industrial areas in Santa Teresa and San Jerónimo on the Mexican side of the border.

Pacheco says the Mexican ambassador had much to say about the renegotiation of NAFTA. He says the ambassador weighed in on the what was going well, and what were the "sticking points" of talks, like the Trump administration trying to increase North American content in auto parts.

“To be able to move free across the border without any tariff’s you have to have North American content at 62.5 percent. The Trump Administration wants to raise that to 85 percent, which almost every single major car company says that’s going to be impossible,” said Pacheco.

Pacheco says that the Trump Administration also wants to sunset NAFTA every five years. Which Pacheco says the Mexican ambassador says that move would be a “Deal-breaker.”

To get companies to invest and expand in the Santa Teresa, Pacheco says they need to have some security that a trade deal will be stable.

“We need to provide a level of comfort to our companies that we’re trying to attract here and create jobs, and that sunset provision every five years is a killer,” said Pacheco.

Last year, President Trump signed an executive order investigating trade with China. KRWG News asked Pacheco if the trade deficit with China (https://www.census.gov/foreign-trade/balance/c5700.html ) may impact the NAFTA negotiations.

Pacheco says the focus is not on the $347 billion trade deficit with China. He says Mexico is fourth on that list behind Japan and Germany.  

“In this case Mexico has been made out to be the villain and the boogieman,” said Pacheco.

Pacheco says that the deficit with Mexico is only 18 percent compared to the one with China. He says if the U.S. really wanted to take care of a trade deficit, it should have been brought up in President Trump’s last trip to China.

“The trade deficit is kind of the 800-pound gorilla also in the NAFTA negotiations, even though it doesn’t make a lot of sense,” said Pacheco.

Pacheco also said that the internet, energy, and labor relations will be very important to the ongoing NAFTA discussions.

Jerry Pacheco is also Executive Director of the International Business Accelerator, and writes a column for the Albuquerque Journal "Business Across the Border." 

This is the second part of a three-part conversation with Mr. Pacheco.